Security Bank profit doubles to P5B

FILE PHOTO

MANILA, Philippines—Security Bank Corp. doubled its first-half net profit to P5 billion from P2.4 billion in the same period last year on the back of higher core interest earnings and securities trading gains.

This 107-percent year-on-year growth in net profit for the first semester translated to an annualized return on equity of 31 percent.

In a statement, Security Bank president Alberto Villarosa said: “Although our first-semester results were exceptionally strong, we benefited from a one-time gain from the disposal of investment securities. Our net interest margins reflect continued stiff competition for deposits and loans.”

The bank grew its loan book by 29 percent to P110.3 billion versus year-ago levels, driving the bank’s asset base expansion of 11 percent to P235 billion. Deposits grew by 26 percent to P130.7 billion year on year.

Net interest income grew to P4 billion, up by 14 percent year on year while net interest margin (NIM) stood at 3.95 percent.

Non-interest income, net of one-time trading gains, was steady as gains from underwriting fees made up for the slack in foreign exchange earnings.

Operating expenses, excluding provisions for credit and impairment losses, amounted to P2.9 billion, 40 percent higher than the comparable period in 2011 mainly due to the significant increase in gross receipts tax as a result of higher revenue. Also factored in were the consolidation of expenses of Security Bank Savings (formerly known as Premiere Development Bank), which Security Bank acquired last February, and the opening of 10 new branches during the first half of the year.

Security Bank chief financial officer Joselito Mape said the bank was in the initial stages of an investment phase with the expansion in its branch network and the acquisition of Security Bank Savings.

“The bank will remain cognizant of costs while emphasizing asset quality and prudence in implementing its growth plans,” Mape said.

In terms of asset quality, Security Bank’s non-performing loans (NPL) ratio stood at 1.1 percent for the period, remaining among the best in the industry with related NPL cover at 219 percent.

Capital adequacy ratio stood at 18.2 percent for the period.